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Law firms are increasingly under pressure to find alternative engagement “Matter Planning has helped Bird & Bird models such as fixed fee arrangements or discounted rates, and to improve have confident client negotiations and deliver the transparency and accuracy of new matter proposals to remain competitive. to clients a more transparent, well-managed, cost effective solution”* To meet their clients’ requirements law firms need innovative tools to help them Paul Colvin, CFO, Bird & Bird make the right business decisions, manage the risk associated with alternative fee arrangements and optimise efficiency in order to drive profitability. * To hear more about Expert Matter Planning please see the interview with Paul Colvin, featured in this month’s issue of Briefing. Aderant Expert Matter Planning provides firms with a sophisticated yet easy to use solution to these business challenges.

Benefits of Matter Planning:

• Save time by searching for similar, historical matters and generate more accurate forecasts and proposals • Track the life cycle of matters to report actual revenues and costs vs. budget • Create a flexible, repeatable process that can be used to plan, forecast, and monitor all new matters • Deliver detailed resource and disbursement budgets • Integration with Precedent H form for Civil Litigation Cost Budgeting (introduced in April 2013 following the Jackson Report)

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briefing on: Finance management in 2013 March 2013

Over the last few years a lot of copy has “I also think that there’re a number of flowed under the bridge of time about how opportunities coming out of [the market the legal market is changing, renewing. It’s changes], with the very large firms all going different. Which is funny because most after the large multi-national clients and the big of the time it’s the same people, and the ticket transactions. That’s opened up a number same firms, doing the same things. Not in of niches [outside those areas]. So if [as a Briefing, of course – we’re trying to spot the smaller firm] you can develop your strategy to trends as they happen. exploit one of those niches, perhaps by taking That’s why this month we interview on some very well-trained people that fall out Robert Boardman, finance director (UK, of an area of businesses perhaps not being US, EMEA, Asia) for newly merged Herbert focused on by one of the big global firms, you Smith Freehills. It’s a new firm, and he’s a can make yourself a very exciting business. relatively new boy, joining , “The key to it is: either go for the big global and the legal sector, in 2009. Before that he strategy which you can afford, or think very spent seven years in various financial services hard about what your specialism is, and then and investment houses, after leaving Arthur remain agile and flexible.” Andersen in 2000. He knows the outside world, He says it still makes sense to be able to and he understands what financial houses be in a couple of geographies – so even for think of other businesses – how they assess the smaller firms, it seems, the future has to their relative health and financial competence. be international even if it’s not global – and It’s that view that’s probably influencing the strategically firms need to look for the lucrative changes happening within HSF. geographies and attempt to create a strategy to HSF’s merger in 2012 with the Aussie exploit them. firm Freehills created a global behemoth, an “There clearly are opportunities in places £800m revenue firm with big connections in like Asia and , particularly, but that Asia-Pac, one of the key markets for growth may not be playing to the strengths of your in legal. It’s a big play, and it may be the only business, or where you see the opportunity. real route for the biggest firms to growth. [Playing in multiple geographies] is one way of But does it mean other firms, if they can’t go balancing up your book of business.” global, are strategically out in the cold? No, The globalisation of Big Law, therefore, leads says Boardman – as long as they can get a clear to a number of further opportunities for firms strategy of their own. not in the top 10 or 20 – these combinatorial “There’s a group of top firms that have strategies open up to them as Big Law fights a made that play, to go for globalisation either bigger battle. It just needs the right people in by organic growth or by merger, and there’s a those smaller firms to see the mix to go for. group of businesses that have that scale and “This is all part of talking about the quality that capability. For the firms that aren’t able to, of earnings that arise from your strategy, and because of their size or the cost of investing you can get quality of earnings from a number in global expansion, and their inability to of different sources by the spread and the fund that, there are still a variety of strategies repeat nature of your clients – or you can get available, in terms of being niche players in it from geography, or from the type of law that both the domestic markets, or combinations of you do. It’s just picking from the matrix.” different markets, focusing on different areas. This is a corporate man speaking, not the

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briefing on: Finance management in 2013 March 2013 how can we remove it? making people more focused on how the client “Other firms are making considerable behaves (when they pay, how they pay, what efforts, but at HSF we think that we’ve got reporting they want, when they want it and so a unique way of looking at optimising our on) makes the firm more client-focused and it revenue. It’s all about the ability to drill down makes it more responsive. and capitalise on your information and your “It’s about visibility and transparency, for business intelligence – being able and knowing both parties. The client knows what you’re when to leverage technology and people, to doing, they’re able to get regular updates, good know when a client’s payment run date is, for example, and agree with a client to submit bills at a different point in the month, knowing that you haven’t missed their payment run date. You get paid faster and that leads to efficiencies of process on both sides. Clients are quite focused on this both from a corporate governance and procurement perspective. When something’s approved, they like to get it paid. They get judged on those payments, because it’s part of their working capital stats and their working capital efficiency. “It’s about visibility and transparency, “Being able to understand for both parties. The client knows what the way clients operate creates a you’re doing and they’re able to get regular virtuous circle, it leads to greater updates, good visibility on financials” business efficiency all around, and increases your level of financial Robert Boardman, FD at hygiene. Revenue is optimised when you do that on a timely basis, but you need processes and technology in place that allow you to find those opportunities and efficiencies, which is some of visibility on financials that they understand what we’re trying to do.” … and that leads to more efficient billing and payment cycles and a better relationship all around, because you understand the client’s Transparency and client service business better.” This delivers against Boardman’s quality of Those processes and technology combine to earnings benchmark and it brims with financial make an attempt to change the way hygiene points. “I’ve got a greater predictability lawyers and business services people work – of income, I’ve got a better conversion rate, and

11 briefing on: Finance management in 2013 March 2013 that allows you to forecast into the future, see whereas previously you might have been what my pipeline is in the business – and that’s running through their list of matters on a a great story for funders and owners in the monthly basis. So it doesn’t change their business as well, because they can see when the behaviour – I don’t like ‘behaviour’ – but it revenue likely to happen, and how likely is it to changes the focus of their day and the focus happen? You get a much better view on your of the support. There are opportunities, then, pipeline and your visibility of how you work within support, to make sure you’re optimising with your clients.” your support efforts, which will yield better This is something banks like Barclays, for example, have been calling on Briefing readers to address for years – because it’s about stability and cash ““Time literally is money in this flow – but it’s more than that, says Boardman. “If you can get business, and I think that [doing this right, you can help make the things this way] gets respect, and I lawyer more efficient and free think people appreciate what we’re up time. It makes them more trying to do. All those little tiny bits efficient in the administrative of intervention and support add up areas, and makes them think to extra numbers which fall straight about it in a different way.” through to the bottom line.” But you do need technology to do this, as well as processes. Technology, linked to processes, trigger points and deep insight into the financials of a firm, lets you see results for the lawyers and release more time “when a matter is getting to a point when it spent for helping clients. might need to be billed, and if you can do that “Time literally is money in this business, and dynamically, you can then help and support I think that [doing things this way] gets respect, ”, says Boardman. This help is very and I think people appreciate what we’re trying guided and proactive, and the example he to do. All those little tiny bits of intervention gives is that one of the finance team might go and support add up to extra numbers which to a lawyer and say: “Ok, you know this client fall straight through to the bottom line.” likes to be billed at this point? You know that the work has built up to the threshold? What would you like to do? Would you like to phone Commerciality is the new normal that client up? Would you like us to issue a bill? It’s now time to do it.” That’s an interventionist Another move firms like HSF are making to finance team, and it’s clawing back significant be more cost-efficient (a phrase Boardman efficiencies for the firm. baulks at significantly in our conversation) in It’s also saving management time, he says. the delivery of legal services is moving work to “You can have a very high-quality two- or lower-cost centres. This might be outsourcing, three-minute conversation with that lawyer, offshoring or near-shoring, but it almost always

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means concentrating certain functions or work are mainly focused on this kind of thing, and in the hands of those who cost less to the firm we can deliver at more competetive price than (and therefore, in theory, to client). HSF is in we otherwise would have done’, that’s of huge the process of moving some work to Belfast, value in terms of the certainty for the business, including due diligence and support for areas and it builds the relationship with the client. So like real estate and funds. I think it’s more about value than cost.” Boardman says it’s “efficient for both the Boardman ‘gets’ value, and can define his firm and the client” to be working more in idea of it. He used to be in the corporate world Belfast, “because we’re doing work to support and knows what it wants from a law firm – his the client, and we’re able to pass through was the role that is increasingly tweaking the those savings to the client, that makes us more ear of in-house counsel to control legal. competitive, and it makes us more efficient”. Clients are not going to go back to a world He argues that it’s not about cost-efficiency, before 2008. How clients expect firms to but about providing value – two sides of the behave, what they want for their money, same coin, to me. It’s just disingenuous, you who’s going to do the work and how much could counter, to say this kind of behaviour transparency they get is the new normal, and isn’t about cost, because HSF’s clients want Boardman wants HSF to be ahead of the game. more for less, and they want cost certainty. So “Clients expect and need you to be perhaps whatever HSF does to correctly resource the more commercial than in the past. And in work (admirable stuff), it’s about cost. terms of providing transparency and the “If I’m buying services [as a corporate] and visibility, you can turn that into a positive point my law firm says: ‘We can give you the same for yourself if you’ve got the right technology, level of quality, we can potentially produce a processes and people in place. It means you can better product because we’ve got people who be adept, get the right support to your people,

13 briefing on: Finance management in 2013 March 2013 get the right people focused on the right things, providing its business intelligence (BI) software and help the client – and however that’s done, and know-how to the firm. But technology isn’t getting the right thing pointed at the client that the real agent of change, says Boardman. the client thinks is value for money. “The [BI] technology is an enabler to make “By having a better relationship between changes in process and support those with the finance and the client, it means the lawyers right people. The technology is important – it have a better relationship with the client. allows you to track and get lots of information It means the whole business has a better out about the way things are developing within business, in a dynamic way, and to respond to those proactively. That then helps you change some of your processes around a client.” Right now this is having a significant impact at HSF both in terms of conversion and recovery, says Boardman. And it’s immediacy, timeliness, that matters. “You’re much more likely to get a better financial outcome if it’s dealt with or you have a conversation at the point that it happens.” Having the financial management information identifies issues and opportunities and good BI and processes allow you to work those opportunities, “You’re much more likely to get a he explains, and to follow up on better financial outcome if it’s dealt them. The IT enables all this, with or you have a conversation makes it possible – but you have to change the way you do finance at the point that it happens.” support and make the processes around it dynamic and timely to Robert Boardman, FD at Herbert Smith Freehills really make it happen. In the end, what Boardman and the rest of HSF are trying out is a fresh way of looking at the innards of legal business. It’s a relationship with the client, and if you blend of business intelligence, business process understand those dynamics then you can turn management and BD. How very Briefing. that into a positive for everybody.” Perhaps this took someone who’d never lived The clever tech behind some of these the bad old, fat old world of legal before 2008 changes is made by a software company called to do it. Perhaps not – but it’s that man who’s Nexum Software, which is working with HSF, doing it. l

14 briefing on: Finance management in 2013 MarchMarch 2013 2013

Feature Embracing the strain As the Legal Services Act finally comes to fruition, the very nature of the finance director’s role is changing – up to a point. Nicola Laver looks at a role that’s now steeped in liability and at the heart of the strategies and tactics that will take some firms to the heights, and some to the brink

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These are tough times for legal business, and levels and controlling costs. “Shoosmiths has today’s law firm finance directors are in an achieved good growth over the last few years, unenviable position, facing challenges that and we are anticipating this continuing; but only the most robust financial management doing so in a sustainable manner is increasingly and discipline can meet. challenging. It can’t just be about buying talent , the latest top 100 UK firm to through lateral hires – it needs to be built from collapse amidst unserviceable debts, joins a trainees up and embedded into a culture where roll call that already features and Dewey & LeBoeuf. Many in the industry expect more big names to go under, but prudent finance chiefs are recognising the current challenges and are implementing pragmatic, sustainable and forward-thinking strategies. They’re also proving refreshingly realistic. FDs cite continued pressure on fees, operating cost increases and the perceived oversupply of lawyers, combined with lower demand for legal services, as pressure points. “Making sure we create the environment Simon Russell, Burges that underpins our brand proposition in a Salmon’s FD, says a number controlled, cost-effective way is crucial to of market level capacity issues making such expansions a success.” need to be resolved before there’s any chance of returning Chris Stanton, FD, Shoosmiths to more familiar conditions. But, he warns: “We may never return to the pre-crash levels of performance – the current situation may be the new normal.” Frank Lewitt, FD at Berrymans Lace Mawer, people want to work.” identifies other financial challenges facing his Such growth, he says, requires infrastructure firm: “Customer resistance to price increases, expansion. But, he warns: “The danger for cost rising costs, changes in the legal services explosion at such times is huge. Making sure marketplace, and threats of more competition we create the environment that underpins as non-lawyer entities enter the market our brand in a controlled, cost-effective way is through ABSs.” crucial to making such expansions a success. Shoosmiths’ FD Chris Stanton says the main The strategy must be consistent over time, challenge to the firm is maintaining growth though we can’t be blind to immediate factors.”

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Same role, different firm? all round and reorganising processes to make them leaner and better”. Tony Cannon, Weightmans’ FD, outlines Finance chiefs’ responsibilities, taking into the basics – that the finance role is to advise account, for instance, their unique offerings, partners and the board on the commercial personnel and firm reputations, really can viability of proposals, and to help weigh up the be very different, says Lewitt. “Although the cumulative impact of a series of initiatives that challenges from the outside world are similar to all firms the internal chemistries are always different.”

New and emerging markets

Navigating the challenges presented by new markets (eg Indonesia and Jakarta) and emerging markets is one that firms ignore at their peril. One FD at a top 15 law firm (who requested anonymity) warns: “One of the biggest problems in emerging markets is persuading clients of the value and necessity of our work, and that the expertise “as a member of the firm’s management involved is not cheap – [a point] team. We are seeking cost cuts all round and not helped by the overcapacity reorganising processes to make them leaner issue, leading to some crazy pricing and better”. which only undervalues us.” The expansion of firms into the Frank Lewitt, FD, Berrymans Lace Mawer East will, he says, lead to a trend of consolidation, given that larger firms will have a greater capacity to cope with start-up dilution. How a may be running in parallel – such as medium- firm reacts to the opportunities really depends term projections of potential impact on profit on its growth strategy, says Mike Giles, FD at SJ and cash flow. Berwin. Plus: “With a UK market heavily ‘over- But Lewitt characterises his main role as lawyered’, any increase in domestic demand finance director in a slightly different way: “To will be very welcome – although competition proactively instil a sense of commercial reality between firms for work is likely to remain high into all the firm’s strategic thinking, and make for the foreseeable future. my opinions known loud and clear.” The FD, “International expansion is more risky, but he says, should act “as a member of the firm’s strategic alliances or mergers can provide an management team. We are seeking cost cuts opportunity for increased cross-border referral

17 briefing on: Finance management in 2013 March 2013 work and improved business stability by External investment reducing the dependency on existing markets and/or practice areas.” Finance chiefs are cautious about external Today’s clients are more discerning and investment, probably with good reason. demanding than ever in terms of value and Charles Furness-Smith, Nabarro’s FD, pricing predictability, and they can afford to be alludes to the idea that successful firms don’t in such a competitive marketplace – and firms need it: “Those firms that went into the cannot afford to ignore their expectations. recession with the appropriate level of leverage

Meeting client demands

“Our clients will still pay for quality, but only just,” explains Lewitt. “All we can do is strive to become as efficient as possible to be able to make a profit from the price we have to accept. However, our clients do not always give work to the cheapest provider and they value our solid robust professionalism.” BLM is, he admits, constantly rethinking its strategy. “Profits are always under pressure, with costs “Those firms that went into rising and prices held back, but the recession with the appropriate we have successfully managed our level of leverage and a margin in excess way through the recession with of 35% are likely to survive.” little trouble.” And firms’ remuneration Charles Furness-Smith, FD, Nabarro models appear to be withstanding the pressures. Russell at says his firm’s “current system supports the behaviours we seek to and a profitability margin in excess of 35% encourage from partners”. are likely to survive. Firms whose business “This helps partners focus on delivering model requires very extensive investment excellent service, rather than worrying about in automation processes may need external how to structure what they do to maximise investment, but it is not suitable for all.” their own profit share.” Lewitt warns against it, though. “You only But Cannon acknowledges that, while get outside investment if there is a serious need Weightman’s remuneration model has worked to do so. This is not a preferred option, and well so far, “it is an area of management under you lose control.” Cannon has a further caveat: constant review”. “Outside investment cannot replace good

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financial management and, on the contrary, be an up-front cost to be funded. poor financial management could well be a “Although banks have generally been willing barrier to attracting such investment.” to provide facilities to fund working capital Our anonymous top 15 FD disagrees, needs for firms embarking on expansion but with a twist: “I can see a role for outside programmes, the low growth environment, investors where there is the potential for reduced client money balances and banks’ significant systemisation of commodity legal increased cost of capital (to name just three product, but less so for premium/larger firms factors) mean that funding is more difficult at this stage.” to obtain and is more expensive. Increasingly firms will be expected to fund more of their cash needs themselves, most likely through Merge, merge! increased partner capital contributions.”

Big name law firm mergers are on the increase, a trend likely to continue in the current Approaching the challenges economic climate. It’s an issue FDs can’t ignore. Giles at SJ Berwin says: “Well-thought Cannon says Weightmans is ensuring it covers through and executed mergers should generate the basics well, particularly cash flow and its an economic benefit through a combination relationship with the bank. of cost savings and revenue growth over a “We then have to ensure we are closely relatively short timeframe, although there will attuned to actual and anticipated developments

20 briefing on: Finance management in 2013 March 2013 in our various markets and ready to respond instance, we issue a daily update to all partners quickly to changes. showing progress against all our key indicators, “We are also constantly aware of the macro including cash receipts and bank borrowings. challenges and opportunities presented by “Finally, one must always link in other the Legal Services Act as impacts start to be aspects of the financial infrastructure that play seen with new entrants to the legal market. a part in working capital management, such as The foundations for being successful in this distribution of profits and capital policy.” area are to have a solid management structure The harsh reality is that law firms must in shape, particularly to facilitate quick decision making on potential investments, and also to have the financial resources on tap to fund such opportunities.” Critical to any FD’s responsibility is, as Cannon identifies, “to raise and discuss the financial implications of any board business and to ensure that the directors have comprehensive financial data to underpin any decision. There is then the need to carry out due diligence on potential investments as they arise and identify the potential deal breakers for the board’s attention as “Partners and fee earners are soon as possible. Normally this has much more likely to appreciate the to be done quickly.” importance of, say, prompt cash Cannon nails it when he says: “The collection on their part if they can see basic housekeeping functions must be given constant attention and one of how it impacts the firm as a whole.” my duties is to always keep a clear eye on how we are performing, in some Tony Cannon, FD, Weightmans cases on a daily basis, and not allow the basics to be ignored when more esoteric opportunities are being considered.” be responsive to existing pressures and Cannon is a proponent of training to all adapt accordingly. But the future need not levels of the firm on financial management so be bleak where law firm structures, top level that all concerned understand the underlying management, financial decision making and financial framework of everything the firm strategies are watertight, and meeting the does. demands of the changing legal landscape and – “Partners and all fee earners are much more just as importantly – the needs of clients. likely to appreciate the importance of, say, As Lewitt says: “All firms need a strong prompt cash collection on their part if they financial director – especially when things can see how it impacts the firm as a whole. For get tough.” l

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briefing on: Finance management in 2013 SPONSORED EDITORIAL March 2013

Briefing Case Study Planned to perfection

Briefing talks to Paul Colvin, CFO at Bird & Bird, about how matter planning software from Aderant is helping the firm proactively manage matter costs and profitability

26 briefing on: Finance management in 2013 SPONSORED EDITORIAL March 2013

The imminent Jackson reforms on costs the best legal advice at a sensible price. The big should be top of mind for most firms – and debate that price squeezing has triggered for us those investing in or already using matter is how to make sure our lawyers can articulate management tools will have a significant the value work brings, not the price of it.” Bird compliance advantage. These firms will also & Bird uses matter planning to ensure that continue to benefit from managing matter profit levels are maintained in an intensely costs proactively to drive up profitability, competitive market, Colvin says. and drive down unnecessary spend. It’s the large corporate financial sector Bird & Bird are a prime example of a forward-thinking firm when it comes to matter planning. An Aderant user since 1997, the firm partnered with the legal software company to co-develop its Expert Matter Planning module, which Bird & Bird implemented shortly after the module was released in 2011. “Cost management has been a key element of our response to the credit crunch and the trend for toughening client negotiations based on price,” explains Bird & Bird chief financial officer Paul Colvin. Matter planning software has, he adds, helped the firm “have confident client negotiations” and “We can keep clients fully informed, deliver to clients a more transparent, flag up any issues early, and make well-managed, cost-effective solution. more accurate projections of cost.” Matter planning augments the firm’s commercial capability, he says. “We can Paul Colvin, CFO, Bird & Bird call upon resources across the firm, in any country, and easily see how team changes will impact on profitability. The Aderant matter planning tool equalises clients that have the most aggressive, price- the commercial playing field. There are some focused, panel selection processes, he says, naturally commercial partners, but many are and matter planning helps to ensure that the just extremely good lawyers. This tool brings a firm doesn’t step into loss on that work, while general level of commerciality to the firm.” being able to offer the best value. “Our strategy Clients have come to demand more for less, is to plan properly for these [clients] and set and they want greater visibility of the cost of a threshold beyond which we just won’t go.” legal work. Matter planning is playing a big Colvin is confident about the firm’s position part in delivering against both of these client in such situations: “Although we may lose out needs, says Colvin. initially based on price at times, clients often “We pride ourselves on being able to provide re-engage, disappointed with the service and

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briefing on: Finance management in 2013 SPONSORED EDITORIAL March 2013

Global and international firms need a wide- “With a modern system like Elite 3E, ranging ability to deliver financial oversight, you can build in the appropriate controls to from a business perspective and from a ensure data is going in consistently, and that compliance perspective. Now that finance business and compliance rules are built into chiefs are also playing a key compliance the workflow. For example, you literally can’t role in UK-based firms, the need for deeper, create a new client in the system or enter timely knowledge of a firm’s financial time against a client unless you’ve done the position is more important than ever, says appropriate anti-money laundering checks. You Patrick Hurley, vice-president for global expansion at Thomson Reuters Elite. “Regardless of whether you’re a big global firm or not, some of your clients are going to be global – so you may only think of yourself as a national firm, but if your clients are doing business globally, the issues of globalisation are going to impact how your firm does business. Finance directors who have offices in other jurisdictions but lack a consolidated global finance system that provides full visibility and control are taking some big risks.” An example, says Hurley, is an “FDs who have offices in other Elite client that took on a small office jurisdictions but lack a global finance in a small jurisdiction that wasn’t yet system that provides full visibility and on their global finance system. For control are taking some big risks.” more than a year the firm was sending in WIP data that they thought was Patrick Hurley, Thomson Reuters Elite accounts receivable data. “Entirely incorrect numbers were being transferred into the global system, purely because head office didn’t have proper visibility into what was going on,” says can’t take a retainer for client monies without Hurley. “That’s a pretty extreme anecdote, but different trust regulation rules being enforced, if you’re not able to see what’s going on, that’s depending on the jurisdiction of the client and where you can end up.” the money and why you’re holding it.” Part of the problem law firms now face is Financial reporting quality stems from that they’re stuck with software, databases enforcement like this, says Hurley, and better in particular, that cannot provide the best reporting is what the business needs – and management information and reporting you what the compliance officer for finance and can get, says Hurley. administration (COFA) must be able to do.

30 briefing on:on: FinanceFinance managementmanagement inin 20132013 SPONSORED EDITORIAL March 2013

Industry Analysis Travelling lighter

Law firms should be reviewing their travel and expense processes to ensure compliance, increase re-billing opportunities and streamline cost management, says Isabel Montesdeoca at Concur

Like all businesses, law firms are operating with UK tax regulations and legislation. in challenging times. But there are many Every billable minute counts, so any things they can do to uncover profitability – processes that can help increase fee earner and something as simple as reviewing travel and support staff productivity, by eliminating and expense management processes could non-core activities and replacing them with help recover invaluable revenue. automated processes, saves money and can According to Jupiter Research, travel is the potentially free up billable hours. second largest controllable expense spend One firm that’s an example of how well behind salaries. Law firm revenues can easily this works is . We at Concur be lost to employee expenses, where up to 20% have been working with Irwin Mitchell or more of T&E spend can be out-of-policy to make the firm’s travel and expense (according to the Aberdeen Group). On top management processes even more efficient. By of this, if a firm can’t see where expenses implementing our T&E management solution are being incurred, it can’t act to negotiate the firm has gained better control of and preferential rates with suppliers or identify visibility into the expense claim reimbursement cash leakage within the firm. process. This has automated the expenses Without proper visibility into T&E spend, process at the firm, but the built-in travel which an automated expense management request functionality also delivers enhanced system can deliver, firms are not just hindering visibility into the firm’s employees’ travel plans revenue opportunities – they lack the before travel is booked or money is spent – all information they require to ensure compliance of which is saving cash.

32 briefing on:on: FinanceFinance managementmanagement inin 20132013 SPONSORED EDITORIAL March 2013

Briefing Case Study Investing for growth

David Abrahams, finance director at Matthew Arnold & Baldwin, talks to Briefing about leasing with Econocom to fund investment in practice and case management systems

The savviest law firms of 2013 are those As the project was a £1.2m spend, Abrahams that understand the real cost of doing work, was keen to find the optimum way to finance doing that work more efficiently, and aiming the project and the right financial partner. Bank to grow market share. To do that, firms need financing an investment like this would have technology – which can cost serious money. restricted the firm’s agility, so MAB instead The challenge is how to fund investment in chose to work with Econocom to finance the IT that can deliver more value to clients the spend on a leasing model over five years and more capability to the firm. including them funding the ‘build stage’ of the MAB is an £18m revenue, full-service firm project until ‘go live’. The five-year lease gave with offices in Watford and . David MAB evenly spread, controlled costs. Abrahams, MAB’s director of finance, explains “This technology is fundamental to that they had made the strategic decision sustaining our commercial and competitive to replace its “dated” legacy IT systems and advantage and for the firm’s next stage of invest in new practice management and case growth,” says Abrahams, “so we would have management systems to deliver an upgrade made the investment anyway.” However, “fundamental to MAB’s business and growth Econocom’s leasing model had many strategy”. It also needed to be financially agile commercial advantages, he says. “Using a bank, over the period of the investment – there’s no we may have had to put debentures or other point in having great IT if paying for it might security in place, potentially restricting other cripple growth. borrowing.” Unlike a loan, leasing also keeps

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